Another tax? What’s it on this time?
Fuel excise is an Israeli indirect tax imposed on fuel and on certain substances capable of being used as fuel substitutes, including various types of oil. In recent years, the Israel Tax Authority has extended the application of the fuel excise regime to certain fuel substitutes. One of the purposes of this arrangement is to combat the practice of blending fuel with other substances, or using substitutes, in order to avoid payment of the tax.
However, where these substances are used for certain industrial purposes rather than for generating energy or powering vehicles, an exemption from excise duty or a refund of the tax paid may be available. For example, oils used as raw materials in the manufacture of plastic products, cosmetics or construction materials may qualify for tax relief, subject to compliance with the applicable conditions and the submission of an appropriate application. These arrangements are set out, among other provisions, in the Fuel Excise (Exemption and Drawback) Order, 2005.
The firm assists clients in assessing their tax liability and eligibility for an exemption or drawback, as well as in preparing and submitting applications to the Israel Tax Authority.